Telangana CM KCR calls for austerity steps

Hyderabad: Coronavirus and GST dues are haunting the Telangana state. Economic slowdown coupled with Centre's indifference towards clearing the pending GST compensation landed the State in deep fiscal crisis.

With increasing financial requirements in the second and third quarters ( July to December) to continue the ongoing welfare schemes, Chief Minister K Chandrasekhar Rao has directed the Finance department to go slow in clearing the pending bills of the contractors and other private agencies engaged in the government-sponsored developmental programmes.

The decision to put on hold the clearance of bills for a while is part of the financial discipline adopted by the government following the steep fall in the State-Owned Tax Revenues (SOTR). The State suffered nearly 40 per cent revenue loss due to the lockdown and continuing corona effect on the trade activity.

To overcome the fund crunch, the government relied on non-tax revenues mainly on the mining and also took some revenue-generating measures like hike in liquor prices and the recently announced LRS scheme aiming to mobilise Rs 1000 crore.

Officials feel that the precarious financial situation will continue for another six months. The government will have to struggle hard to meet the expenses being incurred on essential services mainly the payment of salaries to the government employees, monthly disbursement of Aasara pensions, health emergency in the corona crisis, etc, with the available meagre funds," top officials said, adding that the only option left before the government is to stop clearing bills until the normalcy restored.

According to sources, as of now, bills to the tune of about Rs 10,000 crore, pertaining to the 2019-20 financial year, were pending clearances. Most of the works taken up by the agencies, which are waiting for clearances, were road construction, infrastructure development, mainly buildings for government offices and other developmental programmes.

The departments which need to clear the bills are Roads and Buildings, Education, Health, Panchayat Raj, Municipal Administration and Housing departments.

Construction agencies engaged in the construction of major irrigation projects like Kaleshwaram, Palamuru Rangareddy lift irrigation scheme and Devadula project were however lucky as their bills were getting cleared without delay. The government borrowed funds from the financial institutions to complete these works on a fast pace.